Non-performing loans are hitting Greek banks’ balance sheets and resolving the problem needed careful handling and radical solutions to help banks decouple from this chronic problem and to allow borrowers to meet new repayment arrangements.
In this framework and commenting on recent press reports over Attica Bank’s moves in the management of NPLs, banking sources said that all moves and agreements signed by the bank were fully approved by supervisory authorities in the country. They added that without these agreements, Attica Bank would not be able to continue operations in the future. They said that a strategic investors accepted, despite adverse economic conditions prevailing in the country and the banking sector, to inject 70 million euros in the bank’s capital without acquiring any shares in exchange, while the company accepted to take over the management of all non-performing loans worth 1.3 billion euros and promised to collect -in priority- 525 million euros, a 45 pct of NPLs -one of the highest collection rates worldwide.
Banking sources said these NPLs did not include first home and property of economically-hit parts of the population.
They added that the 1.3 billon euros portfolio is transferred to the investor allowing the bank to restructure its balance sheet, while Attica Bank maintains a 20 pct equity stake in the investor’s management company, expecting to reap additional profits.
The deal allows Attica Bank to restrucure and survive with high solvency rate, fully recapitalised and to focus its activities on working to the benefit of shareholders, depositors, personnel, customers and the national economy in general.